Market Recap: August 2024
Market commentary
- The Labor Department revised job figures downward, indicating that 818,000 fewer jobs were added from April 2023 through March 2024 than initially reported.
- Reflecting an upturn in private inventory investment, an acceleration in consumer spending, and offset by a downturn in residential fixed investment, second quarter GDP estimates indicate the economy expanded at an annual rate of 3.0%.
- Demonstrating improved optimism about the future, and despite concerns about the labor market, Consumer Confidence improved in August.
Select economic and market data
Statistic (monthly unless noted) |
Current |
Previous |
---|---|---|
U.S. GDP (quarterly) | 3.0% | 1.4% |
Consumer Confidence | 103.3 | 100.3 |
Consumer Price Index Y/Y | 2.9% | 3.0% |
Core PCE (x food & energy) | 2.6% | 2.6% |
ISM Manufacturing Index | 47.2 | 46.8 |
Unemployment Rate | 4.3% | 4.1% |
2-Year Treasury Yield | 3.92% | 4.26% |
10-Year Treasury Yield | 3.90% | 4.03% |
Equities
- Following sharp declines in early August, most indices rallied to finish the month with positive returns.
- The S&P 500 posted a 2.4% gain in August, exhibiting a fourth straight month of positive returns, while the small-cap Russell 2000 index declined.
Fixed income
- In anticipation of Federal Reserve easing, bond yields fell across all maturities, with the 10-year Treasury decreasing from 4.26% to 3.92% during the month.
- The yield curve inversion nearly ended in August, with the 2-year Treasury yielding just 3 bps more than the 10-year at month-end.
Strategic outlook
- Some caution warranted on equities in the near-term, particularly in high-growth large cap stocks after recent rally; currently favoring small-cap and mid-cap domestic stocks longer-term.
- Above average volatility is likely given central bank involvement and geopolitical uncertainty.
- Near average expected returns projected for fixed income after period of rising rates and bond market sell‐off.
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